TABLE OF CONTENTS

Obligation of the judge to apply conflict-of-laws rules on his/her own initiative?

II.2.

Renvoi

II.3.

Change of connecting factor

II.4.

Exceptions to the normal application of the conflict rules

II.5.

Proof of foreign law

III.

Conflict-of-laws rules

III.1.

Contractual obligations

III.2.

Non-contractual obligations

III.3.

Personal status

III.4.

Parentage, relationship between parents and children, including adoption

III.5.

Marriage, partnership, divorce, maintenance

III.6.

Matrimonial property regime

III.7.

Succession, wills

III.8.

Real rights

III.9.

Insolvency

Disclaimer

The accuracy of the following statements is not guaranteed. They cannot and should not replace legal advice in specific cases.

The purpose of the statements is merely to provide some basic information about German private international law. That is the purpose for which approval is given for use in the EJN. Any further use of the statements must first be agreed with the Federal Ministry of Justice of the Federal Republic of Germany.

The principal source of
German private international law is the Einführungsgesetz zum Bürgerlichen
Gesetzbuche (EGBGB - Civil Code (Introduction) Act), in particular Sections 3
to 46. However, according to section 3(2) of the EGBGB, rules laid down in
legislative acts of the European Communities and international conventions
that are directly applicable in national law take precedence over the terms
of this Act in their fields of application.

German law also contains
scattered conflict-of-laws provisions elsewhere than in the EGBGB, for
example in the Insolvenzordnung (InsO - Insolvency regulation) and the
Einführungsgesetz zum Versicherungsvertragsgesetz (EGVVG - Insurance
Contracts (Introduction) Act).

In those fields which are
not determined by law, e.g. matters of international company law, the law to
be applied is determined by the courts.

There is an enumeration of all multilateral agreements signed and ratified by Germany in Directory B of the Bundesgesetzblatt (on-line orders via www.bundesgesetzblatt.de ). This list of multilateral state treaties also includes those containing unified conflict-of-laws provisions.

Multilateral conventions of this type are often initiated by international organisations. In this connection, particular note should be taken of the Hague Conference on Private International Law (www.hcch.net). Similarly UNCITRAL (uncitral@uncitral.org) and UNIDROIT (info@unidroit.org), both of which are organisations dealing with the standardisation of international law and the legal framing of world trade, contribute to the development of conflict-of-laws provisions. Germany is active in all three organisations.

II.1. Obligation of the judge to apply conflict-of-laws rules on his/her own initiative?

German private
international law is of importance not only in judicial disputes. Business
partners in different states need to know what law will govern their contract
irrespective of any future legal dispute. Their rights and obligations are
determined on that basis. Car drivers travelling on holiday to another state
have to be aware of the law under which they are liable if they cause an
accident there. This determines the nature and magnitude of the compensation.

A German court called on
to settle a dispute in circumstances which indicate a connection to the law
of another state has to determine the law to be applied, by reference to its
own conflict-of-laws provisions. The German judge has to be familiar with the
rules of German private international law and must apply them ex officio. There
is no choice available.

A change in the applicable law (for "unresolved" situations) is a phenomenon familiar to German law. For example, rights in rem are basically assessed according to the law of the location of the property, so that an item can come to be governed by a different legal order when its location changes.

However, a change of connecting factor is also accepted in other areas of law, one example being a change of nationality.

No change in the applicable law can take place if the conflict-of-laws provision stipulates a specific time of connection. For example reference is made to the nationality of the testator at the time of death in order to determine the inheritance law to be applied (see point 3.7).

A German court must apply
mandators provisions of German law even where German conflict-of-laws rules
themselves require the law of another State to be applied. Neither the
case-law nor the literature provides definitive guidance as to whether, how
and to what extent mandatory provisions of foreign law have to be obeyed in
Germany in instances where German law has to be applied to the facts of the
case.

Section 6 EGBGB enshrines
the German reservation relating to public order. Foreign legal provisions
must be disapplied where their application would be patently incompatible
with fundamental principles of German law. "Fundamental principles"
is taken to mean that fundamental principles of justice have to be at stake.
Generally, this means serious violations of fundamental rights guaranteed in
the German constitution. A further consideration important for the
applicability of the ordre public reservation is whether the facts of the
case reveal a domestic connection; only then will German law usually be
actively relevant.

Not only do the German
courts have to apply their own conflict-of-laws provisions ex officio but
according to § 293 of the Zivilprozessordnung (ZPO - Code of Civil
Procedure) they are also obliged to establish the content of the foreign law
to be applied by means of a judicial procedure based on the discretion and
decision-making powers at their disposal. Courts may avail themselves of the
cooperation of the parties but are not bound by their pleadings.

The terms of the 1980
Rome Convention on the law applicable to contractual obligations have been
incorporated into German law as Sections 27 et seq. of the EGBGB. Sections 7
to 14 of the EGVVG contain special conflict rules for specific insurance
contracts.

Contractual compensation
claims are governed primarily by the law chosen by the parties (section 27
EGBGB).

However, the right to
choose the applicable law is limited for example where the facts are purely
domestic, i.e. where the cross-border element is lacking. In this case, apart
from the choice of law, the mandatory provisions of the law connected to the facts remain
applicable. In the case of consumer contracts, the choice of law must not
result in more favourable mandatory protection provisions of the consumer's country
of residence being superseded.

In principle, where a
choice of law is made, the entire contract is subject to the law chosen. The
parties may, however, make a choice of law in respect of only a part of the
contract terms, while the law otherwise to be applied is determined
objectively.

If no choice of law is
made, the law to be applied is determined by reference to objective
connecting factors. Section 28 EGBGB requires the law with which the contract
is most closely connected to be applied. Normally this will be the law of the
state in which the party who is to effect the
performance which is characteristic of the contract has his habitual or
principal residence. Nonetheless an overall examination of all the
circumstances may reveal that the contract exceptionally displays even closer
connections to another legal system, in which case it is the latter that has
to be applied.

Section 38 EGBGB lays
down differentiated
rules on the law to be applied in respect of claims based on
unjust enrichment. Claims for compensation for services rendered are subject
to the law applicable to performance-based legal relationships. Claims for
compensation on grounds of unjustified intrusion in a protected interest are
governed by the law of the state in which the intrusion occurred. In other
cases the law of the place where the benefit was obtained applies.

Under section 39 EGBGB,
legal claims arising from
the performance of third-party transactions are governed by the
law of the state in which the transaction was conducted. Special rules exist
for the settlement of a third-party debt.

Under section 40 EGBGB
claims to damages arising from an awful act are basically governed by the law
of the place where that act occurred. The injured party may, however, require
the law of that state in which the violation of legal interests occurred to
be applied. If, at the time when the event giving rise to liability occurred,
the person liable and the injured party had their habitual place of residence
in the same state, the law of that state will be applicable by way of special
connecting factor.

Under German private international law, legal questions raised by the personal legal status of a natural person are governed by the law of the state to which the nationality of the person refers.

Where a person has more than one nationality, section 5(1), first subparagraph EGBGB stipulates that reference must be made to what is known as the effective nationality, i.e. the nationality of the state with which the multiple national is most closely connected. If, by contrast, a person with multiple nationality also has German nationality, section 5(1) second subparagraph provides that this nationality alone shall apply.

The nationality criterion is applicable as regards the right to bear a name (for details see section 10 EGBGB) and the legal capacity of natural persons.

III.4. Parentage, relationship between parents and children, including adoption

Under
section 19 EGBGB, the parentage of a child is subject primarily to the law of
the state in which the child is habitually resident. No distinction is made
between children born in and out of wedlock. In the relationship to each
parent the parentage can be determined also under the parent's national law. If the mother
is married, the family law by which she was governed at the time of the birth
may ultimately also acquire significance in the matter of determining
parentage. Different rules apply to children born before 1.7.1998.

Under
section 20 EGBGB, challenges to parentage are governed generally by the law under
which the circumstances of the parentage arose and, where a challenge is
brought by the child, by the law applying in the place where the child is
habitually resident.

Under
section 21 EGBGB, parental responsibility is determined according to the law
applying in the place where the child is habitually resident, insofar as the
1961 Convention on the protection of minors does not come into play.
According to that convention, it is the national law of the child that
applies to certain aspects.

Under
section 22 EGBGB, the effectiveness of an adoption is determined
fundamentally by the national law of the adopting party at the time of the
adoption. Adoption by (one or both) spouses is subject to the law governing
the general effects of marriage. Spouses of different nationalities may
therefore also adopt a child under the law of the state in which they are
both habitually resident. Under section 23 EGBGB it is basically the national
law of the child that applies as regards the consent of the child and its
natural parents to the adoption.

Recognition of foreign
adoptions and establishment of the effectiveness of foreign adoptions are
governed by the Act on the effects of adoptions under foreign law.

Under
section 13 EGBGB, the
requirements for the conclusion of a marriage contract are
those laid down in the law of the state of which the person engaged to be
married is a national. But in special circumstances, German law may be
applied instead.

In
Germany a contract of marriage may be concluded only in the presence of the
registrar or exceptionally of a person specifically so empowered by a foreign
state (section 13(3) EGBGB).

Under
section 14 EGBGB, the general effects of marriage are governed primarily by
the law of the state of which both spouses are nationals, i.e. their shared
national law.

If the
spouses are not covered by the same national law, the law applicable in their
shared habitual place of residence is applied.

A limited
choice of law is available under section 14(3) EGBGB.

Under
section 17 EGBGB, divorce is generally governed by the law which, at the time
of filing for divorce, was decisive for the general effects of marriage, in
other words the legal status of the family while legal proceedings are pending.
In Germany a marriage can be dissolved only by the courts.

German
law governs the usufruct of a marital home and household effects located in
Germany.

Under
section 17(3) EGBGB, the law applicable to sharing pension entitlements is
determined by the divorce law. In certain circumstances where pension sharing
law is not recognised by the foreign law, it will alternatively be
implemented in accordance with German law if the parties so request.

Under
section 18 EGBGB, which incorporates the rules of the 1973 Hague Convention
on the law applicable to maintenance obligations, maintenance claims between
relatives or between spouses are governed by the law of the State in which
the person entitled to maintenance is habitually resident.

If
exceptionally no entitlement to maintenance is conferred by the law of the
place where the person entitled to maintenance is habitually resident, the
shared national law of the parties may be applied. Should this law similarly
be of no avail, the law of the state before whose court the claim for
maintenance was made is to be applied instead.

Under section 15 EGBGB,
the matrimonial property regime is governed by the law applicable to the
general effects of marriage at the time when the marriage was contracted.
Spouses who are both nationals of the same state at that time are subject to
the property regime of the shared state of nationality. Where the spouses are
of different nationalities, the law of the state in which both spouses have
their habitual place of residence at the time when the marriage contract is
concluded applies.

Under section 15(2) EGBGB
persons entering into a marriage contract have a limited choice of property
regime.

Under section 25 EGBGB,
inheritance matters are governed by the law of the country of which the
testator was a national upon his decease. German law may be chosen for land
situated in Germany.

Under section 26 EGBGB,
which incorporates the main conflict-of-laws provisions of the 1961 Hague
Convention on the law applicable to the form of testamentary dispositions, a
will is valid in form if its form satisfies the requirements of a legal
system a connection to which exists by virtue of nationality, the habitual
residence of the testator or the place where the will was made.

Under section 43 EGBGB
rights in rem are fundamentally governed by the law of the state in which the
property is situated. The local law, for example, governs the content of
property and the way in which the property can be transferred or burdened
with a lien.

As regards vehicles,
section 45 EGBGB provides for a special connection.

The removal of an item
from one state to another is also subject to special provisions laid down in
section 43(2) EGBGB.

Lastly land emissions are
also dealt with separately by section 44 EGBGB.

A choice of law as
regards rights in rem is basically
excluded. However, under section 46 EGBGB, the law determined by reference to
the aforesaid connecting factors may be derogated from if the facts show a
substantially closer connection to the law of another state.

Section 335 of the Insolvency Act provides that the insolvency procedure and its consequences are basically governed by the law of the state in which the procedure was begun. Sections 336 et seq. of the Insolvency Act define special connecting factors concerning specific aspects of international insolvency law (e.g. working conditions, offsetting, challenges), which may deviate from this principle.

Further information

The Federal Ministry of Justice brochure on the subject of private international law can be found at http://www.bmj.bund.de/.